A Colorado charter school has created controversy by getting creative with the rules and luring students from other public school districts. The Vilas School District has only 100 students in all grades, but it has a charter school that's enrolled 2,000 online students around the state.

HANSEN: A small school district in Southeastern Colorado is testing the geographic limits of public education with a new online charter school. As a result, the Viola School District has grown from a few hundred students to almost 2,000 in the last year. The district is boosting enrollment by attracting at-risk kids from big city schools 300 miles away.

From Denver, NPR's Jeff Brady has more.

JEFF BRADY reporting:

Southwest Denver is a tough neighborhood. You won't find the sanitized chain stores that are in the suburbs; graffiti is a serious problem. This is where the Latin-American Research and Service Agency, or LARASA, holds classes in one of its community centers. A dozen or so middle school students sit in front of black computers. They're wearing headphones. Everyone is working on a different assignment.

Unidentified Man: Homophone is a word that sounds the same as another word, but is spelled differently and has a different meaning, like these two words: sun and son.

BRADY: Jaden(ph) Martinez is a sixth grader.

Mr. JADEN MARTINEZ (Sixth Grade): I got (unintelligible) school.

BRADY: Really, what happened?

Mr. MARTINEZ: I took (unintelligible).

BRADY: Not a good thing. Martinez and the others are no longer students in Denver schools; instead they're enrolled in a school district about six hours away in the tiny town of Vilas, Colorado. Each class has a mentor that helps students with their work and makes sure they show up for class. Polly Baca heads LARASA which has five learning centers around Denver. She says her group has been trying for decades to reduce Latino dropout rates. She says the learning centers appear to be working.

Ms. POLLY BACA (LARASA): We are now at 80 percent attendance rate, more or less. Where these kids are the kids that were the professional ditchers, you know, they were the kids that knew exactly how to skip school and stay out of school. They're coming to these centers.

BRADY: LARASA relies on a non-profit organization called Hope Online Learning Academy to provide the computers and the curriculum. The founder of Hope is Heather O'Mara. She's not a teacher, but an accountant who ran an online college business for a cable TV company.

Ms. HEATHER O'MARA (Founder of Hope Online Learning Academy): The Hope model is, I believe, it's innovative, but it proposes a change and there's many people that don't support rapid change in education.

BRADY: Just since September, Hope has opened 40 learning centers in Colorado's biggest cities. The centers are not called schools for a reason. State law bars one district from opening a school in another district. By calling them learning centers, state senator and teacher Sue Windels says Hope is sidestepping the law.

State Senator SUE WINDELS (Colorado): Well, when it's a facility where children go to access education, that's pretty close to the definition of a school in my mind.

BRADY: The ban on districts opening schools in another district exists for a reason, says Jane Urschel. She's with the Colorado Association of School Boards. Voters elect school board members to set policy in their districts, but, she says, Vilas and Hope aren't held accountable to local school officials, where the learning centers are popping up.

Ms. JANE URSCHEL (Associate Director, CASB): I would say it's almost a cyber land-grab, if you will, and we have a lot of questions and concerns about how that is being implemented in Colorado.

BRADY: Money is one of the big concerns. In Colorado, funding follows the student, so that means the Vilas' school district, by increasing its enrollment nearly 350 percent in one year is seeing a lot more cash. It's using some of that for equipment like new school buses at its small brick and mortar school. Senator Windels sponsored legislation that would've required each of the learning centers to become a charter school in the district in which they operate. The bill failed, but it clearly upset Vilas' director of online schools, Bill Hines.

Mr. BILL HINES (Superintendent, Vilas School District, Colorado): Senator Windels has done everything in her power to shut the online operations completely down, and you can put that on the radio.

BRADY: Hines says the education establishment is so entrenched that it almost always fights off innovative new ideas. Hines says traditional schools don't work for many of these kids, but the learning centers do.

Mr. HINES: I'm a rebel as far as trying new things, that if they don't work, let's try something different.

BRADY: Senator Windels has called for audit of Vilas online charter school, its finances and the quality of its instruction. Results are expected this summer. Meantime, Vilas and Hope are adding new students each week.

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